Nashville man led class action

Aug. 29, 2013

Written by

Shelley DuBois

The Tennessean

For eight years, Nashville executive George McReynolds has been the face of a fight against racial bias at Merrill Lynch, the world’s largest brokerage house. On Wednesday, the company announced it would pay $160 million to settle a class-action lawsuit that was filed in 2005.

If approved by a federal judge in Chicago, as expected, the payout by Merrill Lynch to about 1,200 plaintiffs would be one of the largest ever in a racial discrimination case.

“He and his wife are really amazing people who acknowledge that they are where they are because there was a struggle before them, and (they) think it’s incumbent upon them to make things better for the next generation,” said Suzanne Bish, a partner with Chicago-based law firm Stowell & Friedman Ltd., which represented McReynolds and several other plaintiffs in the suit.

McReynolds, 68, has worked for Merrill Lynch’s Nashville office since 1983. He still works there, even after filing the lawsuit.

McReynolds had been with the company for nearly 20 years when he filed the suit in 2005.

According to his original lawsuit, the company culture was “toxic” for African-Americans. In 2005, only 700 out of its 14,000 financial advisers were African-Americans. McReynolds was one of only two African-American brokers in Tennessee when he was hired in 1983. The Nashville branch didn’t hire a second African-American employee until 1987.

Beyond its lack of diversity, Merrill Lynch would impede the careers of African-American employees it hired, the lawsuit claimed.

For instance, Merrill Lynch prevented African-American employees from working with high-profile clients, for example, the suit alleged. It also promoted a companywide policy that encouraged associates to work together on certain cases, and African-Americans were generally excluded from these beneficial partnerships, the lawsuit said. Finally, after creating an atmosphere that prevented the success of African-American financial advisers, executives at Merrill Lynch would allegedly publicly badmouth the performance of minority employees, the suit alleged.

From the 2005 lawsuit: “In (a) meeting, supposedly aimed at diversity and mentoring, a representative from human resources announced that African-Americans were disproportionately in the bottom quintile of brokers at Merrill Lynch. These public statements were not made with a critical eye toward improving Merrill Lynch’s policies and practices, but instead simply served to reinforce the perception among McReynolds’ managers and peers that African-Americans are inferior and incapable of competing as brokers.”

In 2006, 16 African-Americans who had been employed at Merrill Lynch joined the suit.

Four years later, U.S. District Judge Robert Gettleman denied the suit class-action status. But the Court of Appeals for the Seventh Circuit in Chicago granted the status in 2012 — reviving the case and vastly extending its reach.

Today, Merrill Lynch, which is a subsidiary of Bank of America, has chosen to settle out of court instead of fight.

Bish said the settlement should force changes beyond the company singled out as the defendant in the eight-year-old lawsuit.

“They are leaders on Wall Street,” she said. “And increasing opportunities for African-Americans at Merrill Lynch should spill over to the rest of Wall Street.”

Representatives from the Nashville office of Merrill Lynch were not available to comment.

Bank of America spokesman Bill Halldin offered this statement:

“We’re working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers.”

McReynolds, for his part, is spending time in his Tennessee home recuperating from a recent surgery. His wife, Elaine, a civil rights advocate in her own right who chose to shine the spotlight on her husband, was unavailable for comment Wednesday.

“This is his story,” she said, adding that justice, in this case, has been a long time coming.